Much has happened since my last blog post two weeks ago. Eclipsing all else has been the death on 8 September 2022 of Her Majesty Queen Elizabeth II – surely one of our greatest Britons. It is right that we mourn as a country as if a family. If anyone deserves that, she does.
What is appropriate in this period of mourning? Hashi Mohamed and I decided to postpone our clubhouse chat about his new book A home of one’s own that was due to take place this Monday. It will now happen at 6 pm on Wednesday 5 October 2022 and we hope that you can join us. It felt wrong to be promoting the event actively this weekend and having what I hope will turn out to be a lively, no holds barred, discussion on what is wrong with our approach to housing.
However, it feels equally wrong to pretend that everything else of concern in the world is on hold. There was literally no other news on the BBC last night.
And yet, these are momentous times. Liz Truss became prime minister on 6 September 2022 and on the morning of 8 September 2022, opening a debate on energy policy, she announced an energy price guarantee for individuals and businesses as wider energy policy changes (see Government announces Energy Price Guarantee for families and businesses while urgently taking action to reform broken energy market (press statement, 8 September 2022)). The energy price guarantee (a matter that is literally of life or death to many people, and a matter of survival or not for many businesses) needs to be fleshed out and of course one of the controversial aspects of the measure is the decision not to impose any further windfall tax on energy suppliers. Another controversial aspect is the unsurprising announcement by Truss that the Government would resume its support for fracking:
“We will end the moratorium on extracting our huge reserves of shale, which could get gas flowing in as soon as six months, where there is local support.”
Fracking proposals have effectively been on hold since November 2019, following this announcement by Andrea Leadsom and Kwasi Kwarteng: Government ends support for fracking (press statement, 2 November 2019)
“On the basis of the current scientific evidence, government is confirming today that it will take a presumption against issuing any further Hydraulic Fracturing Consents. This position will be maintained unless compelling new evidence is provided. While future applications for Hydraulic Fracturing Consent will be considered on their own merits by the Secretary of State, in accordance with the law, the shale gas industry should take the government’s position into account when considering new developments.
The OGA has advised the government that until further studies can provide clarity, they will not be able to say with confidence that further hydraulic fracturing would meet the government’s policy aims of ensuring it is safe, sustainable and of minimal disturbance to those living and working nearby.
The Infrastructure Act 2015 included the requirement for operators to obtain Hydraulic Fracturing Consent which ensures that all the necessary environmental and health and safety permits have been obtained before activities can commence. The Consent process also includes the requirement for an independent financial analysis of the operator to be carried out to ensure they can meet their licence obligations, including decommissioning.”
This was followed through into the Conservative manifesto for the December 2019 general election:
“We placed a moratorium on fracking in England with immediate effect. Having listened to local communities, we have ruled out changes to the planning system. We will not support fracking unless the science shows categorically that it can be done safely.”
With a new Prime Minister, and a new Business Secretary, a new approach. Remember this for instance? Rees-Mogg downplays fracking risk and eyes ‘every last drop’ of North Sea oil (Evening Standard, 4 April 2022)
By way of contrast, as quoted by Sir Keir Starmer in his response to Truss’ speech, this was Kwarteng from March 2022 when he was Business Secretary:
“Even if we lifted the fracking moratorium tomorrow, it would take up to a decade to extract sufficient volumes – and it would come at a high cost for communities and our precious countryside.
Second, no amount of shale gas from hundreds of wells dotted across rural England would be enough to lower the European price any time soon.
“And with the best will in the world, private companies are not going to sell the gas they produce to UK consumers below the market price.”
Surely there are at least five questions at large:
Is there now adequate scientific evidence that fracking is safe?
We are waiting for the publication of a review by the British Geological Survey of the science of fracking, commissioned in April by BEIS, which has apparently had it since early July. Its publication is apparently imminent.
Have we any headroom within the “net zero by 2050” target to allow us to continue relying on extracting and burning hydrocarbons and what example does this set?
A bigger question but surely this is a big step away from where we should be heading.
Is it feasible in any event to extract meaningful levels of shale gas which would have any meaningful effect either on energy security or energy prices?
Maybe circumstances have changed so radically since Kwarteng’s March 2022 comments such that current gas prices suddenly make fracking a potentially economic proposition? We don’t have the data but what a u-turn that would be from that March statement. In any event is there the evidence that as a country we do even have large amounts of shale gas to extract? The quantities would surely need to be enormous to have any economic impact.
Given the technical and planning processes involved, and widespread public opposition, how will projects secure local support such that gas can be flowing within six months?
It’s interesting to compare with the on-shore wind policy position – still restrictive, the killer restriction being, by way of footnote 54 of the NPPF, that “a proposed wind energy development involving one or more turbines should not be considered acceptable unless it is in an area identified as suitable for wind energy development in the development plan; and, following consultation, it can be demonstrated that the planning impacts identified by the affected local community have been fully addressed and the proposal has their backing.”
Not at all easy – and fracking is way less popular than on-shore wind. Indeed, there was a fascinating Survation survey last week Polling in every constituency in Britain shows strong support for building wind farms to drive down consumer bills. 34% supported gas from onshore fracking while 45% opposed.
Who knows, perhaps we will see a return to the idea of a “shale wealth fund” for the benefit of local communities that I have just remembered that I was writing about in my 8 August 2016 blog post Back Yard Back Handers?
So is this all largely about anti-woke political positioning – and, as with the decision not to impose any further windfall tax on them, about signalling to energy companies that the UK is still open for (fossil fuel) business?
In the words of our fictional Prime Minister Francis Urquhart: “You might very well think that; I couldn’t possibly comment.”
Simon Ricketts, 10 September 2022
Personal views, et cetera
NB For up to the minute policy commentary on fracking issues I do recommend the Drill or Drop website.